Shin-Etsu to invest $500 million to boost US vinyls capacity

8:39 PM MDT | June 19, 2013 | Robert Westervelt

Shin-Etsu says its US subsidiary Shintech will invest $500 million to expand chlor-alkali, vinyl chloride monomer (VCM), and polyvinyl chloride (PVC) at production sites in Louisiana. Project completion is targeted for 2015, the company says. Shintech produces chlor-alkali, VCM, and PVC at an integrated vinyls complex in Plaquemine, LA, and also operates a PVC unit at Addis, LA. The chlor-alkali and VCM expansion will be at Plaquemine and expansion of PVC will be at Addis, according to a Shin-Etsu spokesperson..

Shin-Etsu says the investment will boost PVC and VCM capacities each by 300,000 m.t./year and caustic soda capacity by about 200,000 tons/year. The investments will lift Shin-Etsu’s US PVC capacity to 2.95 million m.t. across sites in Louisiana and at Freeport, TX. Shin-Etsu is the largest global and US maker of PVC.

Shintech’s Plaquemine complex started production in 2008 with 450,000 tons/year of chlorine; 750,000 m.t./year of VCM; and 600,000 m.t./year of PVC. In 2011, the company expanded VCM by 800,000 m.t./year and chlorine by 500,000 tons/year.

Shintech says it continues to sell out US PVC production despite weak domestic demand. The company has aggressively expanded sales into Latin America. “Our basic policy is that any and all product we can produce must be sold,” Shin-Etsu executive chairman Chihiro Kanagawa said in a recent interview with CW. “It’s a clear and simple policy.” Shintech’s low-cost position allows it to remain profitable even in depressed market conditions. Kanagawa said that Shintech produces PVC for half of what it costs the company to make PVC in Japan. “And shale gas has made the business even more competitive,” Kanagawa added. “It is a heaven-sent opportunity. I am very thankful.”